Notes

Ukraine invasion: What does it mean for UK energy supply and global climate change action? Climate News
The Home Office’s initial response was criticised for being slow and bureaucratic, as the department’s overriding instinct to prioritise control, and security won out over pressure to get refugees into safe UK accommodation quickly. The same failure to ‘see the face behind the case’, to take a compassionate approach to service delivery and to balance competing priorities contributed to the Home Office’s failings in the Windrush scandal and lay behind its subsequent transformation programme. https://bagge-albrechtsen.mdwrite.net/what-do-vladimir-putins-threats-really-mean-for-russia-the-west-and-the-ukraine-war-3f-huffpost-uk-politics will rise as a result of the war in Ukraine, the National Farmers' Union (NFU) has warned. Factory production jumped in February amid rising domestic demand, fewer raw material shortages and easing global supply chain pressures, according to the latest snapshot from IHS Markit and the Chartered Institute of Procurement and Supply (Cips).

Mr Johnson said the invasion of Ukraine should “mark the end” of the West’s soft approach towards Putin who he said needed to be “put back in the box”. This explainer looks at the direct trade links that do exist between the UK and Russia, and two key areas of the UK economy most likely to be exposed. In a joint news conference with Nato secretary general Jens Stoltenberg, Mr Johnson said Europe faced its biggest security crisis in decades. Disruption to Russian gas exports to other European countries would also push up prices in other markets the UK uses, such as Norway, as demand would rise across Europe. The war has strengthened political consensus that domestic renewables offer the cheapest and most secure form of energy. The muted response to Russia’s invasion of the Crimea in 2014 had already shown that, as a former UK ambassador to Moscow and Washington put it, “there was a problem in the Foreign Office; the old Cold War cadre of people just wasn’t there”.
Some migrants might stay in neighbouring Poland and eastern European countries, but some might head further west and eventually end up in the UK. Nato powers are already promising to build up their own forces in the alliance's eastern flank. Russia might use the crisis to launch cyber and other hybrid attacks on Nato countries.

Unprecedented sanctions will hurt Russia – but may not change Putin’s approach
Even with prices falling faster than expected, next winter still looks challenging – and energy is likely to remain front and centre of the political agenda well beyond that. In the meantime, individual countries including the UK are supplying Kyiv with money and weapons and helping to train its armed forces. British diplomats said Mr. Cameron and other senior officials had made it a priority to reach out to Republicans who were hostile to further aid.

And while commodity prices tend to be only a small proportion of the price of final food products, UK consumers would be likely to see higher prices on supermarket shelves – this could manifest later this year at a time of already high inflation. Ukraine is known as the "breadbasket of Europe," responsible for a large proportion of the world's wheat. A little earlier, we told you about a report in the Financial Times that the EU was proposing to sabotage Hungary's economy if Budapest blocks further aid for Ukraine this week. “A humanitarian crisis is unfolding before our eyes, leaving thousands dead, forcing millions of refugees to flee their homes and threatening an economic recovery that was under way after two years of the pandemic,” she said.
However, Russia’s invasion of Ukraine – and sanctions imposed as a response by the UK and its allies – could still have a significant impact on the UK economy. But one industry body warned the UK faced a higher risk of recession as the impact of the Ukraine conflict would add to the sharp rise in living costs. While climate change is often deemed a "threat multiplier", it is clear from the last week "that fossil fuels are a threat multiplier too", she said.

UK manufacturers face higher costs as Ukraine crisis hits supply chains
Although Russia accounts for a relatively small share of the global trade in goods, rising energy prices are expected to further push up factory costs after issues caused by Covid-19. We have also not made any explicit adjustments for the domestic consequences of international sanctions on Russian financial institutions or individuals, beyond what might be reflected in equity prices in the fiscal forecast. We do not assume these actions have a material effect on overall financial stability, lending, or investment in the UK. So far, however, the UK, US and EU have refrained from imposing financial sanctions that would directly disrupt gas and oil trade, although there is evidence that some traders are reluctant to deal with Russian suppliers. Gazprombank, which is part owned by Russian energy giant Gazprom and acts as a key bank for Russia’s energy conglomerates, has so far been excluded from the SWIFT ban. Trade between the two is small relative to the size of either economy and Russia is not closely integrated in the global financial system.

Russia's invasion of Ukraine means significant uncertainty for the UK economy, the chancellor has warned. The revival of NATO’s purpose and a unified western response have been a necessary if painful reminder of where UK interests truly lie. "We live in an unstable world. If rich counties fail to support vulnerable countries in tackling climate impacts and in their clean energy transition, it will only fuel a spiral of instability." The impact of the Russian invasion of Ukraine on our forecast for the UK economy comes primarily via the impact of higher energy prices on inflation, real incomes, consumption and imports.
"Renewables have a distinct security of supply advantage in that they don't require refuelling," explains environment expert Antony Froggatt. She also predicts a rapid short term boost to energy efficiency efforts across Europe, which would reduce energy demand. With war raging in Ukraine, many fear ministers will be distracted from climate action. Many companies are now making the decision to leave Russia, due to the difficulties inherent in operating under sanctions, deep uncertainty about Russia’s economic future, and reputational concerns.

Engaging with government
For reasons of history and geography, Britain recognized that support is not as “instinctive” for Americans as it for the British, according to a senior diplomat, who spoke on condition of anonymity because of the diplomatic sensitivity of the matter. Duncan Brock, the group director at Cips, said there had been a welcome boost for manufacturers despite prices for raw materials remaining high and disruption continuing for many firms. Russia is the world’s largest exporter of natural gas and among the top suppliers of crude oil, commodities such as wheat, and metals including palladium, platinum, gold and aluminium.


This explainer looks at the direct trade links that do exist between the UK and Russia, and two key areas of the UK economy most likely to be exposed. Prior to Russia's invasion, the Foreign Office had seen a decline in its Russia expertise - despite the government having described the country as "the most acute threat to our security" in the Integrated Review. The muted response to Russia’s invasion of the Crimea in 2014 had already shown that, as a former UK ambassador to Moscow and Washington put it, “there was a problem in the Foreign Office; the old Cold War cadre of people just wasn’t there”. The new Department for Energy Security and Net Zero is tasked with plotting the UK’s course out of the crisis.


In his speech Jon Cunliffe talks about the impact that the Russian invasion of Ukraine has had on the UK economy and on UK financial stability. He discusses what implications this could have on monetary policy, and gives an assessment on the resilience of the financial system. For decades the European Union has heavily relied on Russia's oil and gas, generating money and cash for Russia. But Russia is also reliant on revenues from fossil fuel sales, which make up around two fifths of government revenue. The UK, along with the US and EU, announced that some Russian banks would be excluded from SWIFT, the widely used global inter-bank messaging network that enables cross-border transactions.


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